The Metrics-Driven Startup: Which Metrics Matter And Why

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The Metrics-Driven Startup: Which Metrics Matter And Why

  1. 1. The Metrics-Driven Startup Which Metrics Matter and Why Hiten Shah Lean LA • September 21st, 2010
  2. 2. Ferrari F430 Spider
  3. 3. 152 miles per hour
  4. 4. Most Startups Crash and Burn
  5. 5. Let’s talk about what else is easy.
  6. 6. Stop measuring what’s easy.
  7. 7. Start measuring what matters.
  8. 8. Failure attracted me to The Lean Startup
  9. 9. Vanity Metrics
  10. 10. Actionable Metrics
  11. 11. Are the metrics you are tracking helping you make decisions?
  12. 12. Example SaaS Web App • People sign up and pay online • They first sign up for a 7 day free trial • Then they pay $97 per month
  13. 13. Example SaaS Web App • People sign up and pay online • They first sign up for a 7 day free trial • Then they pay $97 per month What are your assumptions?
  14. 14. Software as a Service Product (Assumptions) Key Actions % of people # of people Visit Site 100% 1000 Sign Up 10% 100 Activate 5% 50 Upgrade 1% 10 Revenue $970 per month
  15. 15. Baseline these key actions and assumptions.
  16. 16. Software as a Service Product (Actual Baseline) Key Actions % of people # of people Visit Site 100% 1000 Sign Up 3.6% 36 Activate 1.2% 12 Upgrade 0.4% 4 Revenue $388 per month
  17. 17. What would you try to improve? Key Actions % of people # of people Visit Site 100% 1000 Sign Up 3.6% 36 Activate 1.2% 12 Upgrade 0.4% 4 Revenue $388 per month
  18. 18. Software as a Service Product (Video Test) Key Actions % of people # of people Visit Site 100% 1000 Sign Up 6.5% 65 Activate 1.8% 18 Upgrade 0.3% 3 Revenue $291 per month vs. $388 baseline :(
  19. 19. Get Inspired!
  20. 20. Software as a Service Product (Inspired Test) Key Actions % of people # of people Visit Site 100% 1000 Sign Up 7.7% 77 Activate 2.8% 28 Upgrade 1.2% 12 Revenue $1164 per month vs. $388 baseline :)
  21. 21. Software as a Service Product (Compare all 3) Key Actions Baseline Video Test Inspired Test Visit Site 100% 100% 100% Sign Up 3.6% 6.5% 7.7% Activate 1.2% 1.8% 2.8% Upgrade 0.4% 0.3% 1.2% Revenue $388 per $291 per $1164 per month month month
  22. 22. Crazy Egg Pricing Before
  23. 23. Crazy Egg Pricing After
  24. 24. Crazy Egg Pricing Results • Before - 150 sign ups per day • After - 15 sign ups per day • But revenue doubled in the first month!
  25. 25. Start measuring what matters.
  26. 26. Questions? Got questions? Want advice? Email Me! hiten@kissmetrics.com

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